Nictus: Recession crush results

Jo-Maré Duddy – The cash-strapped consumer and government left locally listed Nictus Holdings Ltd stranded with net retail loss for the second year running.The group’s results for the year ended 31 March 2018, released on the Namibian Stock Exchange (NSX) on Thursday, shows a net loss of about N$12.2 million for its retail segment. This is 18.5% bigger than the net loss the segment suffered in the previous financial year.Nictus’ reported sale of goods of nearly N$735.5 million for the past financial year, a drop of N$145.7 million or 16.5% compared to the same 12 months in 2017.Sale of goods represents the bulk of Nictus’ total revenue. For the year under review, it constituted about 88% of the total revenue of around N$831.9 million. Other revenue was made up of finance income of N$62.2 million (7.5% of total revenue), insurance premium income of N$32.7 million (3.9%) and rental income of N$1.5 million (0.2%). Finance income was 12.8% higher compared to the 2017 book-year, while rental income increased by 241%. Insurance premium income dropped by 7%.‘Virtual stagnation'“The 2018 financial year was earmarked by a virtual stagnation in the economy mainly due to the moratorium on government spending. Many a project came to a complete standstill as there was almost no cash flow,” Nictus chairman Gerard Swart commented on the group’s results.The influence of this could be felt throughout the economy, he said. “The retail spending in the Namibian market consequently declined significantly.”Managing director Philippus Tromp added that the group was not “excluded from the effect of the economic meltdown that was felt in all sectors of the economy we were dealing in”. “The secret to survival is to be able to adapt and this is no easy task,” Tromp said. “Although it was with much effort, we are thankful that we could maintain profitability within the current circumstances,” he said.RetailNictus’retail segment saw declines on all front, Swart said.“The motor industry’s sales continued to decrease further and as predicted in last year’s report, the full brunt of the consequence of the withdrawal of General Motors [GM] South Africa was experienced by us,” he said.According to Tromp, the impact of GM’s withdrawal on Auas Motors was “significant, along with new imposed regulations that were enforced on the motor industry”. “We imposed drastic structural changes and realignments,” Tromp said.“However, this compelled us to revisit our strategy in the Namibian motor industry and we repositioned ourselves with a new set of objectives. We are confident that our current brands, Isuzu and Opel, are the partners which will be a force to be reckoned with. “With Opel vehicles being assembled in Walvis Bay during the second half of the year, we are optimistic that this will indeed bring a new dimension to Auas Motors and will play a major role in propelling us to a new level of excellence,” he continued.Tromp said Nictus achieved a “major turnaround in Trentyre” compared to the 2017 financial year. “Aligning our structure and optimising our resources were some of the main contributors. The renewed focus on the core business of selling tyres, was attained and the management team put in a gigantic effort to effect this turnaround in such a short period,” he said.Swart said Nictus’ furniture subsidiary was hardest hit by the negative economic environment and the downward spiral of disposable income of consumers.“We had to make some major adjustments and realignments to ensure sustainability,” Tromp said. Driving the group’s long-term growth strategy in Nictus furnishers still remains a priority, more so in the current circumstances, he said.“Attaining our ideal market share was systematically accomplished. A strategy which we will continue to employ in the coming years, with a major focus on economies of scale, will enable us to maintain our current structure and footprint,” Tromp said.Other segmentsHakos Capital and Finance’s performance was aligned with those of Auas Motors because of the group’s strategy within the company, Tromp said.“With vehicle sales reaching the levels of 2010/11, this had an impact on the performance. With the extended period allowed for financing, we anticipated the long-term effect of the economic downturn and reacted in advance, and the real results will only be seen in about 18 months’ time.”Arrears are also seen to be increasing and this trend will be closely monitored and managed, Tromp said.According to Swart, Nictus’ property segment also suffered from the same fate of diminishing revenue as the other segments, mainly because the majority of its properties are occupied by group companies. “We do have strategies in place to reduce this impact on our group results,” he said.“With an imminent increased vacancy factor in the coming year, we will continue to optimise and reconstruct our premises and grow our portfolio within our set of guidelines,” Tromp added.OutlookAccording to Tromp, the current economic situation in Namibia is the “new normal”. “The sooner we adapt and enforce change, the sooner we will see the situation improving.”Swart anticipates that the economy will still be in “dire straits for some time to come, but with a moderate recovery projected for the next two to three years”. “We will work hard to establish profitability in all our segments and I foresee that these strategies will gradually show profits again - despite the difficult circumstances under which we are operating at present,” he said.Nictus’ board approved a dividend of 12c per share for the past financial year, the same as in 2017.“The cash flow and profit forecasts look favourable and with reserves collected during the prosperous years, we decided to maintain the dividend of the previous year of 12 cents to show our commitment and confidence in our products and services while developing a sustainable dividend policy for the future,” he said.The dividend will be declared out of retained earnings.Nictus Holdings is listed on the Overall Index of the NSX. It closed at N$1.80 per share on Friday.

Nictus: Recession crush results

Comments

Namibian Sun 2026-03-13

Please login to leave a comment

Nictus: Recession crush results

Comments

Namibian Sun 2026-03-13

Please login to leave a comment

Subscription Required to Access Content ×

Login

Subscription Required to Access Content